Written by Yong Min Wei & Joseph Chin
Thursday, 28 January 2010 08:00
KUALA LUMPUR: The market could see some respite on Thursday, Jan 28 from the three days of heavy selling this week which erased about RM25 billion from the market capitalization.
The selling of banks and PLANTATION []s, followed by glove makers and other stocks this week pushed the market capitalization to near the RM1 trillion mark, way off the high of RM1.036 trillion on Jan 20.
There could be some mild buying interest as sentiment firmed up following the stronger overnight close on Wall Street.
However, at Bursa Malaysia, concerns of higher interest rates could somewhat restrain the buying.
Borrowing cost may rise as early as March following Bank Negara monetary policy committee's (MPC) statement on Tuesday that rates could not be kept too low for too long to prevent a build-up of imbalances.
U.S. stocks rose on Wednesday, Jan 27 after the U.S. Federal Reserve said it will keep interest rates near zero and ahead of President Barack Obama's State of the Union address later in the day.
The Dow Jones industrial average gained 41.87 points, or 0.41 percent, to end at 10,236.16. The Standard & Poor's 500 Index rose 5.33 points, or 0.49 percent, to 1,097.50. The Nasdaq Composite Index climbed 17.68 points, or 0.80 percent, to 2,221.41.
Stocks to watch include EON CAPITAL BHD [], HONG LEONG BANK BHD [], DRB-HICOM BHD [], GADANG HOLDINGS BHD [] and Hume Industries (Malaysia) Bhd.
Hong Leong Bank gave EON Cap until Feb 2 to further study the RM4.92 billion takeover offer to acquire its entire assets and liabilities.
However, the Minority Shareholders Watchdog has advised EON Cap minority shareholders to walk away from the deal which is priced at RM7.10 per share.
Property developer SUNWAY CITY BHD [] has hired RHB Investment Bank and Credit Suisse as the main coordinators for the planned listing of its real estate investment trust (REIT) in Malaysia.
DRB-Hicom’s unit Hicom Holdings Bhd will take its 79% subsidiary EDARAN OTOMOBIL NASIONAL BHD [] (EON) private through a capital reduction and repayment exercise which is expected to be completed in the third quarter this year.
The group said 80.83 million shares would be canceled comprised 52.15 million shares held by the minority shareholders and 28.68 million shares held by Hicom.
As for Petra Perdana, the board will hold a press conference this afternoon on the latest developments following the boardroom and shareholder tussle.
Gadang has proposed to acquire a leasehold parcel of residential land off the Sungai Besi Highway in Sungai Besi here for RM33 million or RM62 per square foot.
Its subsidiary Natural Domain Sdn Bhd plans to buy the land measuring about 49,377.47 square metres from GSS PROPERTIES [] Sdn Bhd.
Hume posted a net profit of RM34.03 million in its second quarter ended Dec 31, 2009 versus a loss of RM100.77 million a year earlier, mainly due to the turnaround of its 42%-owned SOUTHERN STEEL BHD [].
In Alliance Financial Group, the board of Alliance Bank Malaysia Bhd is in the midst of evaluating the responses submitted by its group CEO Datuk Bridget Lai but no time frame has been set to complete the assessments, said bank director Tee Kim Chan.